- Positive RSI divergence suggests decreasing momentum in Bitcoin’s price decline, hinting at a possible market bottom.
- U.S. monetary policy changes and growing M2 money supply could influence increased investment in cryptocurrencies.
Bitcoin’s market trajectory experienced a brief respite from its four-day slide, only to conclude the week on a downturn.
The recorded its lowest weekly closure in four months amid heightened market fluctuations, driven by multiple factors including upcoming economic data releases from the U.S. such as the Consumer Price Index (CPI) and Producer Price Index (PPI).
Throughout the last week, Bitcoin led a general downturn across altcoin markets, heavily influenced by ongoing sell-side pressures stemming from Mt. Gox repayments and consistent Bitcoin sales by Germany. Bitcoin saw a temporary uplift on July 6, climbing to $58,472, but resumed its decline the following day.
Adding complexity to Bitcoin’s performance, technical analyses point to a bearish outlook. A notable double-top formation on the daily chart suggests a potential price decrease after Bitcoin’s inability to surpass a significant resistance level.
This pattern was further confirmed as Bitcoin closed the week below the lower Bollinger Band on its weekly chart, which typically indicates a strong downward trend.
Currently, Bitcoin trades below key exponential moving averages (EMA) across various timeframes, indicating a prevailing bearish sentiment among investors. To counteract this downtrend, bulls need to drive the price above the 20-day flattening EMA on the 4-hour chart.
Despite these challenges, a positive divergence in Bitcoin’s daily Relative Strength Index (RSI) offers a glimmer of hope. The RSI dipping below 30 suggests that the downward momentum might be waning, a sign historically associated with nearing market bottoms.
This week’s CPI and PPI data from the U.S. are anticipated to directly impact crypto markets, testing traders. Lower interest rates, as suggested by analysts from Citi Research who predict a series of Federal Reserve rate cuts, typically foster favorable conditions for riskier assets like cryptocurrencies by reducing borrowing costs and enhancing liquidity.
Additionally, the U.S. M2 money supply, which has seen consistent growth, suggests increased liquidity that could heighten inflation and drive more investors towards cryptocurrencies as alternative assets.
Furthermore, the Bitcoin network’s decreasing hash rate in June, reflecting reduced mining activity due to lower profitability, hints at potential miner capitulation—a signal often preceding a market recovery.
As investors and traders watch these developments closely, the interplay between U.S. economic policies, market technicals, and global economic conditions will likely dictate Bitcoin’s price movements in the coming days.
BTC PRICE
As of the latest data from ETHNews, Bitcoin (BTC) is trading at $57,194.72 USD, with a slight increase of 0.09% in the past 24 hours. The market cap is $1,132,115,797,804 USD, with a 24-hour trading volume of $30,283,559,704 USD. Bitcoin has a circulating supply of 19,719,725 BTC out of a total and maximum supply of 21,000,000 BTC.
